Microsoft sells over half of its $1 billion AOL patent portfolio to Facebook

Posted:
in Genius Bar edited January 2014
Microsoft has signed a deal with Facebook to sell the social networking site $550 million worth of patents from the over $1 billion portfolio it recently acquired from AOL.

Facebook will get 650 patents and patent applications from Microsoft, and license the rights to use 275 other patents Microsoft is retaining in the deal, according to a report by Reuters. Microsoft will also retain the rights to use the patents it is selling to Facebook.

Microsoft bought the package of AOL patents, which cover technologies ranging from e-commerce to mobile devices and services to advertising, earlier this year in a deal that won out over competitive bids from Amazon and eBay.

Microsoft's general counsel Brad Smith, stated that the company's deal with Facebook enable it "to recoup over half of our costs while achieving our goals from the AOL auction."

The patents Microsoft acquired from AOL involved rights to inventions used by AOL's ICQ instant messaging and, in an odd twist of fate, the Netscape browser Microsoft worked hard to put out of business in the late 90s with its own Internet Explorer.

In 2007, Microsoft invested $240 million in Facebook, and the two companies have since partnered on Bing web search and Skype video chat since. The deal was viewed as a defensive measure by Facebook to protect itself from patent litigation by Yahoo (which Microsoft has also partnered with in web search since 2009).

Facebook already owns a portfolio of 56 patents and 503 applications of its own, along with 750 patents it acquired from IBM last month.

The strategic race to acquire patents has recently blossomed to involve every major tech company. Last summer, Microsoft partnered with Apple and RIM to buy up Nortel's wireless patents for $4.5 billion, followed by Google's deal to buy all of Motorola Mobility for $12.5 billion.

Comments

  • Reply 1 of 8
    lilgto64lilgto64 Posts: 1,147member


    Oh great - MS gets to retain the right to use those patents - so how long will it take before someone Goole sells or licenses one (or more) of those patents and then the company who paid get sued by Microsoft because the sale or license from Goole did not affect MS's right to use - or where MS sues that third party when they try to collect royalties from MS but MS claims that they have perpetual right to use regardless of future ownership of the patent.


     


    Hang on a sec - now I am too confused and cannot continue.


     


    I guess MS still has some shrewd business folk - lets sell the patents but keep the right to use - get the benefits but not have to deal with the hassles of ownership. 


     

  • Reply 2 of 8


    Facebook is the next MySpace -- a flash in the pan that will be yesterday's news before you know it...  


     


    No way I'm using the Facebook spy network... 

  • Reply 3 of 8
    myapplelovemyapplelove Posts: 1,515member


    the great facebook, making money off of each and everyone of their users, by spying upon and putting on a database, every single one of their preferences, habits, and friends and selling them to advertisers. What a commendable business model. 

  • Reply 4 of 8
    jlanddjlandd Posts: 873member


     


    Quote:

    Originally Posted by libertyforall View Post


    Facebook is the next MySpace -- a flash in the pan that will be yesterday's news before you know it...  


     


     



     


    Whatever other epithets we can hurl at it, you can assume facebook stepped beyond flash in the pan status a few years back.  And no doubt it will be yesterday's news at some point, but certainly not before we know it.

  • Reply 5 of 8
    damn_its_hotdamn_its_hot Posts: 1,173member


     


    Quote:

    Originally Posted by lilgto64 View Post


    ...I guess MS still has some shrewd business folk - lets sell the patents but keep the right to use... 


     



     


    Isn't that just plain prostitution?

  • Reply 6 of 8
    stelligentstelligent Posts: 2,680member


     


    Quote:

    Originally Posted by libertyforall View Post


    Facebook is the next MySpace -- a flash in the pan that will be yesterday's news before you know it...  


     


    No way I'm using the Facebook spy network... 



     


    LOL. Some people are never shy to make ridiculous statement. But it's all good because we don't know who the unenlightened person is behind the ID.

  • Reply 7 of 8
    stelligentstelligent Posts: 2,680member


     


    Quote:

    Originally Posted by Damn_Its_Hot View Post


     


     


    Isn't that just plain prostitution?



     


    I'm not an expert in the subject, but how's that prostitution?

  • Reply 8 of 8
    stelligentstelligent Posts: 2,680member


    Whatever people say about Microsoft, this is yet another brilliant move of theirs. Sheer brilliance.  But then, serendipity played a part. Zuckerberg was too busy jumping into bed with Kevin Systrom and left the underwhelming Sheryl Sandsberg to negotiate on Facebook's behalf with AOL. This should help put Sandberg's competence, whatever it may be, in the proper light.

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